Ferry operations were suspended in March, 2009 after the Hawaii Supreme Court ruled that a state law allowing the Superferry to operate without a second complete environmental impact statement was unconstitutional.[2] The company went bankrupt as a result of these actions preventing service in Hawaii.[3] On July 2, 2009 a Delaware Bankruptcy Court granted the company's motion to abandon both the ships Alakai and Huakai, ending all possibilities that the company might return to Hawaii;[4] the ships were bought by the US Maritime Administration in 2010.[5] The United States Navy eventually purchased the craft for a total of $35M, a small fraction of their original $180M cost.[6]

The first ship, the Alakai, arrived in Honolulu Harbor on June 30, 2007.[7] The second ship, the Huakai, was scheduled for completion in 2009, but due to state court ruling halting service, the Huakai was abandoned along with Alakai.[4]

Private steamships and ferries were the sole way of traveling between the islands from the 19th century until the 1950s and returned twice since statehood, first with vehicle ferries in 1959-1960s between Oahu, Maui and Big Island aboard which legendary surfer Eddie Aikau moved with his family from Maui to Oahu. and Seaflite which operated fast 50 knot hydrofoils between the major islands in the mid-1970s.[8] Currently there is passenger ferry service between Lana'i and Maui.

The concept of the Superferry was founded in 2001 and first announced by founders Timothy Dick, John Garibaldi, and Robert "Terry" White in September 2003 after more than two years of planning. Hawaii Superferry stated its plans to operate a daily service between the newly built interisland ferry terminal at Pier 19 in Honolulu Harbor to Kahului on Maui and Nawiliwili on Kauai, with later expansion of service to Kawaihae near Kona on the Big Island. The company claimed fares for a family trip to be similar to the equivalent airfare, car rental, and parking.[9]

Generally, the issues surrounding the Hawaii Superferry can be summarized as:

Procedural concerns - The Hawai'i State Supreme Court ruled that Gov. Lingle illegally exempted the Hawaii Superferry from an environmental impact study and later ruled that the special law exempting it was unconstitutional.[14]

Environmental concerns - These can generally be divided into concerns for marine life (primarily due to the speed of travel, which, although slower than Seaflite ferries which operated without incident in the 1970s, critics cited as unnecessarily high and dangerous to whales, dolphins, turtles and other animals). Concern for the environmental impacts were threatened by the virtually unrestricted inter-island transport of vehicles, particularly by O'ahu residents engaged in recreational activities. The unrestricted inter-island transport of vehicles also threatened the spread of invasive species between islands. The eggs of a coqui frog, an invasive pest on the big island, can travel through mud splashed underneath vehicles.[15] The introduction of invasive species further jeopardizes endemic endangered species.

Militarization - It is pointed out that the Superferry's Chairman, John F. Lehman, is a former U.S. Navy secretary whose expertise is in the investment in companies with marine, aerospace or defense applications.[16]

Traffic Congestion - Due to the size of the state and lack of roads and other improvements on the outer islands, traffic expanding to these areas is a concern although not significantly different than visitors renting cars on those islands.

Service began with inaugural $5 fares. The inaugural voyages were sold out. The voyage to Maui was smooth and uneventful with a few environmental protesters observing peacefully at Kahului Harbor. However, about a dozen protesters on surfboards blockaded the ferry at Nawiliwili Harbor on Kauaʻi. The Coast Guard cleared the ferry's path after 90 minutes.[19] Upon docking, protesters confronted passengers, including Kauaʻi residents, and some vandalized cars. Several protesters were arrested.[20][21][22][23]

On August 27, 2007, Judge Cardoza issued a temporary restraining order barring the Superferry from accessing Kahului Harbor, causing Maui service to be suspended.[24] Meanwhile, the Superferry was forced to turn back from its second trip to Kauaʻi after protestors again blockaded the Nawiliwili Harbor resulting in several more arrests. Superferry passengers were forced to remain on board for 9 hours, while Kauaʻi residents were denied the ability to board the ferry. The company subsequently suspended services to Kauaʻi.[25]

The protesters' concerns were that a ferry of this size traveling at speeds of about 40 mph (64 km/h) could strike and kill whales during its voyages despite this never occurring during the years the faster (50 mph) Seaflite interisland ferries operated. Other concerns included the potential to import invasive species between islands, and the potential to bring drugs and homeless people to Kauaʻi although it is unclear whether such risk was any different from the interisland airlines.[26]

In a meeting with State Senate President Colleen Hanabusa on September 14, 2007, the company stated that it may have to find another home for the ferry in order to pay operating expenses, repay debt, and provide return on the investments made. Describing their meeting, Hanabusa commented that they would have staying power for "a month—outside, a month and a half." Superferry officials, while declining to elaborate, did not dispute this.[27]

On October 9, 2007 Maui Judge Joseph Cardoza ruled the ferry could not resume service while the state conducts an environmental impact assessment. Two days later Superferry CEO John Garibaldi announced that the company would lay off 249 employees. Fifty-nine workers remained on the job to handle administrative and operational duties. The maritime community was disturbed by the loss of jobs for U.S. mariners.[28]

In mid October 2007, Governor Linda Lingle met with the leaders of the Hawaii State Legislature to propose a special legislative session to allow the ferry to operate while the state completed an environmental impact assessment. Senate and House leaders agreed. Governor Lingle called the Legislature into special session on October 24, 2007.[29] In preparation for the session, legislators made trips to Kauaʻi, Maui, and The Big Island to get reactions. On Kauaʻi, the meeting was calm, but on Maui the meeting was more emotionally charged.[30]

On Monday October 29, 2007 the State Senate approved a bill to allow "large capacity ferry vessels" to operate between ports in the Hawaiian Islands while an environmental statement is prepared.[31]

The House passed the bill on October 31 on a vote of 39-11.[32] Governor Lingle signed the bill into law on November 6, 2007.[33]

On Wednesday November 14, 2007, Maui Court Judge Cardoza lifted the injunction banning the ferry from sailing to Kahului Harbor consistent with the new law. Hawaii Superferry's CEO John Garibaldi released this statement: "On behalf of Hawaii Superferry's family of employees, we are pleased with the judge's decision today. We are grateful for the support shown by the governor, legislature, and residents of Hawaii and look forward to commencing service soon."[34] Superferry restarted daily round trip service to Maui on December 14.[35]

In December 2008, environmental groups and the company returned to court for an appeal of the previous ruling. On March 16, 2009 the Hawaii Supreme Court ruled that allowing the Superferry to operate prior to completion of the environmental study was unconstitutional.[36] The company immediately suspended service and laid off its 236 employees.[2][37]

On May 30, 2009, two months after suspending service, Hawaii Superferry filed for Chapter 11 Bankruptcy protection.[38][39] The company would then abandon the vessels ending all possibilities to return service.[4]

On February 8, 2010 state lawmakers announced the introduction of a bill that would buy or lease both the Alakai and Huakai and possibly start a state-run ferry service;[40] the bill was killed two months later.[41] The revival resurfaced in July 2010 when former Honolulu Mayor Mufi Hannemann introduced a "10-point action plan to boost the state's economy if he is elected governor." Hannemann said he was in talks with a group of investors interested in buying both Alakai and Huakai.[42][43]

On March 21, 2011, the Hawaii State senate committee approved a planned proposal to establish a state-run ferry authority with the power to borrow money and purchase a high-speed ferry for interisland service. House Bill 1239, introduced by state Rep. Joe Souki of Maui, would set up the Hawaii State Ferry System and a special fund for its operation. However, there were mixed reaction as to how it will be structured and to how it will be run.[44]

On February 4, 2016, the Honolulu Advertiser reported that lawmakers have directed the Department of Transportation to conduct a feasibility study to establish a ferry system.